March 25, 2013

Report: Mergers and acquisitions activity expected to climb in 2013

This blog has previously discussed the importance of cloud computing and technological innovations when it comes to M&A activity. Entrepreneurs who have even remotely considered selling their business would be wise to prepare themselves, as a recent survey showed that a majority of bankers and lawyers believe that 2013 will have more business mergers and acquisitions than 2012. 

According to a report by the Brunswick Group, a public relations firm, 97 percent of deal makers are optimistic about the success of M&A activity in North America for the new year, with 82 percent saying that more mergers will be struck worldwide this year than in 2012.

"What is behind the higher hopes for the coming year? It is largely a function of more confident chief executives and boards, according to the survey, with improving economic conditions and the continued abundance of cheap financing the next most-cited reasons," explained a New York Times article.

In Brunswick's six years conducting this survey, this is the highest that confidence levels have ever been.

Specifically, 71 percent of advisers based in North America surveyed believe that the deals would be done within the continent, as opposed to overseas company acquisitions. Even so, respondents said that Latin America was becoming a more popular location for M&A activity, with 11 percent reporting that it would produce the most acquisitive companies. Last year, just 4 percent of those surveyed had those same feelings.  

A majority of the North American-based bankers and lawyers – 89 percent – also said that larger buyouts, similar to Dell Inc's $24.4 billion sale, will be more popular. Overall, one-third of respondents said that consumer goods and retail would have the most activity, but technology mergers and acquisitions were a close second, along with the energy sector.